Buying a 5plex. Numbers are great but dieing town. Input?

Question

I am looking to purchase a 5 unit apartment building in a small town in Maine. I am getting a deal at 60k for the building. Appraisal value is 120k. 3 units occupied, two vacant currently. Building is in fair condition and in no need of any major repairs. Everything sounds good except for location. Its in a dieing town. The town has 1 gas station, 1 grocery store, 1 restaurant. Surrounding towns and cities are 10 miles away which isn't bad.

Only thing I am afraid of is getting tenants into this building. But in such a small town you would think people will only want to rent. This town doesn't have much to offer but the numbers all work great if I can keep the building full. Advice?

James C. · Answer

Andrew,

If it's in Caribou you'd better know that market well. With 2 of 5 units vacant it's not a good sign. Make   sure your numbers work at 2 units. If you are looking at someplace like Rumford or Bucksport I'd pass. Also, check thoroughly on deferred maintenance.

If you're prepared on all those counts then go for it!

Good luck!

Jim

Linda S. · Answer

@Andrew Michaud,

A 5-unit apartment building for $60K-- absolutely I'd buy it!   If towns with better jobs are within 15-30 minutes, there will be someone!   You only need 2, that's 2 tenants/families, definitely doable!   If you can allow animals, that's one thing people will pick  your place over someone else's, or a big thing down here is to include a WD in each unit, that's seen as a huge perk!   Just make your apartments better, and they will be filled.  Aggressively advertise, or even offer move-in specials!   I don't know your area, but if section 8 is an option, that's another way to make it filled.      If the closest city/town was an hour... it'd be a different story, but people will drive for a cheaper, nicer place.